McCallie team meets National Personal Finance Challenge

Test your personal finance knowledge

1. How will a large increase in the supply of labor in the market for plumbers impact new plumbers entering that market?

A. The new plumbers will more easily be able to find jobs.

B. The wage rate for plumbers will decrease.

C. The total demand for plumbers will decrease.

D. The wages of the more experienced plumbers will increase.

2. A person's FICO credit score is often used in all of the following, except:

A. Being considered for a loan.

B. Applying for a rental lease.

C. Opening a savings account.

D. Applying for a job.

3. In order to minimize possible inflation risk from an investment in U.S. Government Bonds, an investor might also choose to invest in:

A. Certificate of Deposit

B. Money Market Mutual Funds

C. Growth Stocks

D. Passbook Savings

4. Which of these represents the MOST conservative investment portfolio?

A. 70% equities; 20% fixed income and money market; 10% cash

B. 50% equities; 50% fixed income and money market

C. 70% fixed income and money market; 10% equities; 20% cash

D. 20% fixed income and money market; 60% equities; 20% cash

5. Ann's family has saved $2,000 this year for recreation. After considering their options, they rank ordered their top 3 choices: (1) an above-ground swimming pool, (2) a trip to the beach, and (3) a new television. If Ann's family chooses the swimming pool, the opportunity cost of their choice would be:

The audience was dead silent as the four McCallie School seniors faced off against the team from Missouri's Hannibal High School. It was the national championship, this was the final round, and the two teams were neck-and-neck.

Seated at opposite tables on the stage in St. Louis, each team had a buzzer as they battled back and forth, fighting for the title in the fifth annual National Personal Finance Challenge. They'd been preparing for weeks and had already beaten 18 other teams. Now McCallie was up against last year's defending champions.

"How do the benefits of a Roth IRA differ from the benefits of a traditional 401K plan?" the moderator asked.

Wrong. Now Hannibal High School had a chance. But the team gave the same answer, and the moderator counted it as right.

"Hold on a second, we just said the exact same thing," Alex protested. The competition's judges hesitated, redeliberated, then agreed. The point went to McCallie.

In the audience, teacher Skeeter Makepeace and volunteer coach Jeff Turner sat on the edge of their seats. They were about halfway through the 30-question round. Turner told Makepeace he might need to leave. He felt sick.

"I don't think I can stand this anymore," he told her.

The four seniors didn't plan to make a run at the national championship when they took the first online finance challenge a few weeks ago for an economics class. They were busy with other stuff: swimming, rowing crew, piano, cello, cross country, ultimate frisbee, wrestling.

But the boys -- Alex, Jackson Houston, John Moreton and Jimmy Lau -- found the personal finance questions fascinating, even fun. They qualified to compete at the state level in Nashville, went there and won. And that's when they decided to get serious.

"There was about a month-and-a-half between state and nationals," Alex said. "That's when we did everything we could. From the first day to the last, we gave it all we could."

The goal of the annual nationwide challenge is to highlight the importance of personal finance classes at the high school level, said Mike English, president and CEO of the Missouri Council on Economic Education, which organized the event with sponsor Wells Fargo Advisors.

"This is the one subject that everybody really needs to learn, and they'll learn it eventually, either the hard way or the easy way," he said. "By teaching that in a classroom setting, students leave high school with a fundamental understanding of how the economy works and how to make money. We wanted to demonstrate what high school students can master in terms of financial education."

The state winners were whittled down from about 10,000 students who entered the first round of the competition. That's about 2,500 teams. Only 20 teams made it to nationals.

McCallie never before had competed in the challenge, and no one knew what to expect. Turner, a McCallie alum and planner at Capital Financial Group, gave the boys special lectures on spending, credit, investing, debt, insurance, risk protection.

"We read more and more books; we picked up everything we could get our hands on," Jackson said.

They went through online training courses and spent their spare time studying.

"We did it after school, not because we were punishing ourselves, but because we love to do it," Alex said, adding that he personally put in around 150 hours of preparation.

Then, on Wednesday, they made the eight-hour drive to St. Louis to compete against 19 other state-winning teams from across the country.

In the first round, members of all 20 teams took two multiple choice tests individually. Then, the teams took a multiple choice test together. When the scores from those tests came in, the McCallie boys had answered 105 questions. They'd missed only four.

That put them in one of the top two slots, and qualified them for the final, fast-paced quiz round. During that round, the two teams were never more than two points apart. Turner remembers thinking that it could go either way.

The finals came down to the last question. McCallie was up by one. If they answered right, they won. If they answered wrong, they went into an overtime tie-breaker.

On one side of the room, McCallie suits and striped ties. On the other, the collared shirts of Hannibal High.

The question. If inflation is higher than interest rates, what happens to the value of your savings?

Buzz. McCallie.

They depreciate.

Right. They were national champions. They jumped up. Turner jumped up. Makepeace jumped up. She cried. They'd each won $1,000. And a glass trophy. And bragging rights.

"I'm so proud of them," Makepeace said. "Some of what I teach is on this, but most of it they did on their own. All I did was lead them to water. They just did great."